Yes it does because the Nokia phone kit that I have mine mutes the radio/CD when the phone is in use.
Which one it is is a different question as I did not install the kit I can not advise - it would be best if you ask this question in the "ICE and Blue&Me" forum that is where the sound system people hang out.
the factory headunit should have a wiring schematic sticker stuck atop of it, which will help. if the there is a mute, it will be in the green mini-ISO plug, position C8:
connect your speaker output wire into the headunit in the same plug as the mute audio quality will be far better and you'll be able to adjust in call volvume by the head unit or steering wheel controls if fitted.
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